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HEADLINE NEWS:
PCAOB Says Post-Sarbanes-Oxley Audits Still Deficient
Staff Writer
AccountingWEB. December 9, 2008
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EXCERPT: The Public Company Accounting Oversight Board has released a report summarizing the inspection findings of the eight domestic accounting firms that were subject to annual inspections over the past four years. The PCAOB focuses its inspections on those areas of an audit likely to pose the most significant challenges for an auditor or to pose the most significant risk to investors of misstated financial statements. These include areas that are fundamental to any audit, such as testing of revenue, as well as areas that pose increasingly challenging issues in current market conditions, such as testing of fair value measurements. The report describes deficiencies observed in these areas, as well as deficiencies in the following additional audit areas: identifying departures from generally accepted accounting principles (GAAP), auditing of management's estimates, income taxes, and internal control, performing analytical procedures and audit sampling, using the work of specialists, and assessing materiality, audit scope and audit differences. The report also includes information on changes in the quality control systems that firms have described in remediation plans submitted in response to the first years of inspection reports. These include changes to their structure, partner evaluation processes, internal inspection programs, procedures for using the work of foreign affiliates, and processes for compliance with independence requirements. "The Board's focus on improvements in the firms' audits and quality control systems is critical to our mission to protect investors. This report describes areas where we have found problems, and notes steps the firms have undertaken in response to certain quality control criticisms," said Mark W. Olson, PCAOB Chairman. […] The eight domestic firms covered by this report (BDO Seidman, LLP; Crowe Chizek and Company LLC; Deloitte & Touche LLP; Ernst & Young LLP; Grant Thornton LLP; KPMG LLP; McGladrey & Pullen, LLP; and PricewaterhouseCoopers LLP) |
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